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MCOM4040 Marketing and Communications : Strategy of Nike

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Questions:

Part 1

Individual - Marketing report

Case

Nike Inc. is one of the world’s largest multinational retailers of athletic shoes, apparel and sports equipment. With world headquarters in Beaverton, Oregon, USA, Nike operates through more than 930 retail stores across 190 countries, an e-commerce site and independent distributors and licensees.

Nike created a portfolio of brands capable of reaching across multiple sports, lifestyle categories and price points; some of which include wholly owned subsidiaries Converse, Hurley and Jordan.

Over the years Nike has been widening its target audience and in 2015 opened its first UK women’s only store in London’s King road, to inspire women of London to reach their athletic potential (Nike, 2015).

The store offers women free weekly Nike+ training classes and a Nike+ run club. Sessions can be booked in store and online at www.Nike.com/London. Additional services offered in store are bra fitting, gait analysis and pant hemming alongside product advice.

Scenario

As a newly joined marketing assistant of the Nike marketing team, you have been asked by the director to write a report addressing the following task areas:

(Word counts below are indicative)

Task 1: Marketing orientation 

Task 2: Marketing environments 

Explain the components of a marketing environment analysis (200 words)

Identify three (3) macro environmental factors that impact Nike’s marketing decisions. Discuss whether these factors create marketing opportunities or threats for Nike (250 words)

Discuss two (2) forces in Nike’s micro environment that should be monitored (150 words)

Identify and explain three (3) internal environmental factors that could be considered as either strengths or weaknesses in Nike’s operation, from a marketing perspective (200 words)

Task 3: Marketing strategies

Explain the importance of market segmentation in planning a marketing strategy for Nike (150 words)

Discuss whether Nike uses a differentiated or undifferentiated targeting strategy for its women’s product range, use examples to illustrate your points (250 words)

Task 4: Marketing mix

Using the 7ps, Identify and describe Nike women’s current marketing mix ensuring you provide detailed descriptions (400 words)

Part 2

Individual – Communication Campaign (A4 Poster and 500 words rational)

The Marketing Director has announced a new objective for the company:

To increase awareness of Nike’s women’s only store free training services in London, from 12% to 25% by December 2017

In order to communicate Nike’s new objective, the marketing director requires you to prepare:

Task 1: A visual illustration following the guide below:

The content of the poster should be appealing to both internal and external stakeholders (i.e. employees as well as customers).

The content must include image/s and brief written message/s that will increase awareness of Nike’s women’s only store free training

Task 2:Rational to support the communication campaign (the poster) which should:

 Include an explanation of the promotional mix theory

Describe the campaign target audience and the response sought in relation to the new objective.

Outline the chosen channelto be used


Include an explanation of the communications key message

Apply / use a marketing theory such as ‘AIDA’ (Attention, Interest, Desire, and Action) or ‘DRIP’ (Differentiate, Reinforce, Inform and Persuade) to explain how the poster created will achieve the objective set.

Answers:

Introduction

The report is totally about the marketing and communication strategy of Nike, one of the leading business giant in the production of footwear and other accessories. For every organization, it is very important that it does a good review and study about its marketing and communicating strategies which includes studies about different environmental factors, market segmentation of the organization and other important elements of business environment with the help of different methods and ways like Marketing Mix, PESTLE’S Analysis, Poster’s Five Forces, SWOT Analysis, etc.. These methods are mainly used because it helps organizations to realize about their strengths and weaknesses that they have and also helps them to know how they can be more efficient with their work and how they can cope up with various internal as well as external business environment factors (Kim et al. 2014).

Part 1- Task 1

Marketing Orientation Approach

Firstly, marketing orientation is a part of market activities where the organization first targets a particular market and then it tries to discover what the customers’ needs and wants are or what their demands are in particular. The organization also does various activities to convince the customers like pricing of goods, good communication with the customers, designing, good delivery system, satisfying goods and services, etc (Parente and Strausbaugh-Hutchinson 2014).

How Nike Takes a Marketing Orientation Approach

Nike fulfils all the necessary elements that are required for a successful marketing orientation. For example, Nike understands very well about the consumers they have targeted which gives them a greater value. Nike has a very capability of adopting customer’s preferences with the change in time. Another good example of Marketing Orientation Approach of Nike is that they do a very good research on customers marketing strategies to see how its competitors meet their customer’s needs. Nike has a very good marketing plan and so far they have fulfilled their promise with their customers on giving them high quality products, with various styles and preferences, designs and with reasonable rates and also continuous availability of the products. They have been leading the market with innovative thoughts and ideas, for example Nike+ and Nike Free, etc. Nike has been able to mange criticisms very well. They invest a lot on areas like product development and Marketing Research (NSRL). Another good example of Nike’s Market orientation approach is that after they have targeted their customers, they test the demands of their customers by having powerful advertisements where they invite heavy famous sportspersons and celebrities for the advertisement of their products before launching it in the market to create a better market for the organization (Lehman and Wickham 2014).

Task 2

Components of Marketing Environment Analysis

The marketing environment analysis mainly consists of two components namely, the Micro and Macro Environments.

Micro Environment

The micro environment which is also called the internal environment consists of various factor that are their within the organization. The various factors in the micro environment are:

  • The Organization Itself

The organization itself is the first factor under the micro environmental component. The organization’s mission statement and its long term goals and objectives are made by the top level management of the organization. And the short term goals are made and framed by the middle level management (Pike and Page 2014).

  • The Suppliers

The suppliers are mainly those organizations who send all the necessary requirements to the other organizations for the production of goods and services. The organization carefully ensures the management that all the required materials are there so that it doesn’t faces any hindrance in its work flow (Malhotra, Birks and Wills 2013).

  • Intermediaries

This is another essential environmental component which helps the organization to promote, sell and distribute its products and services to the final customers. The intermediaries can be of different types like physical distribution markets, marketing services agencies, consumer market, international market, etc.

  • Competitors

Another main component is that of competitors. All the organizations face certain competition in the market. Therefore it is very important for the organization to come up with innovative ideas and products which will allow an organization to distinguish itself from its competitors and have a good share in the market (Ashill and Jobber 2014).

  • Public

The last but another main component is the public. The organization should be able to differentiate between the public and the customers. The public can be various forms like media public, government public, local public, general public, etc.

Macro Environment

The micro environment, which is also called the external environment are those external factors of a business organization which is totally out of control of the organization. Some of the macro environment factors are:

  • Demographic

The demographic factor is mainly about the study regarding age, gender and income of the people on the basis of which the market segregates its market.

  • Economic

The economic factor is that factor which influences the customer’s purchasing power as per the customers spending patterns.

  • Political Factors

There can be political and government issues in the business environment of the organization which can sometimes hamper the day to day activities of the organization.

  • Social & Cultural Factors

The organization should not perform any kind of business activities which hampers or go against the cultural or social values of the environment it is in. otherwise, it can have a bad image in the environment.

Three Macro Environment Factors That has Impact on Nike’s Marketing Decisions

Demographic

The demographic factor has been having quite a huge impact on Nike’s marketing decisions. This is because, Nike has been segregating its market mostly by following demographic segmentation where it targets mainly the middle aged and youths and also those people who own good income. And this factor has been a good strength and an opportunity for Nike as for so long, this particular factor has been doing well for Nike (Kim et al. 2014).

Economic

The economic factor has also greatly affected Nike’s marketing decisions. Mainly because in some areas, though people show a good demand for Nike’s products because their economy and overall income earning range isn’t so good, Nike has not been able to sell their products as per the demand. So this factor has been a threat for Nike in some of its market with poor economy.

Culture & Social

The reason why Nike is doing very well in the footwear marketing department is that Nike’s product doesn’t have any kind of negative impact on the social and cultural values on any of its market. And this has been one of the greatest opportunities as well as strength of Nike.

Two Micro Environment Force of Nike that has to be Monitored

The Human Resource Management

Nike has to well monitor or study about their human resource department because they are the one to recruit workers in the organization and Nike has to ensure well that its HRM recruits those people who will work most efficiently for the organization.

Customers

The organization has to do a good study about their customers’ needs and wants because the completion is so high that their competitors may come up with things that can take their market share. So they have to do a very good study about their customers regarding what they really expect from the organizations.

Three Internal/Micro Environmental Factors having Impact on Nike’s Marketing Decisions

Intermediaries

The intermediaries have been acting as a great strength of the organization. Nike advertises its products in a very powerful manner such as inviting celebrities, actors and selling their products through retail giants of the market.

Suppliers

At present scenario, the suppliers have been one thing to focus on more. This is because there so many similar organization that have come up that the demand for the products from the suppliers have gone so high because of which the  suppliers nowadays have increased the rate of their products very high. This affects the overall revenue of the organization in long run. So, this has been a weakness for Nike.

Public

The general public has been strength for Nike. Nike has been able to place a very good name in the eyes of the general public as an organization with high quality products and reasonable rate. So this image has worked well for Nike when it comes to marketing of their products as the public have a positive approach on their products.

Task 3

Market Segmentation of Nike

Demographic Segmentation

Demographic Segmentation divides the market as per the customers age, gender, income, etc. when it comes to age, Nike mainly focus on teenagers to middle aged people and their income segmentation is mainly on middle to upper class income earning people. Nike focuses on both the genders of the said age (Cross, Belich and Rudelius 2015).

Geographic Segmentation

Geographic Segmentation divides the market as per the physical feature and the structure of the place. Currently, Nike footwear is very famous in the European Union countries and the Asia Pacific regions. Nike has a huge market in all the football and rugby playing nations.

Psychographic Segmentation

Psychographic segmentation is the division of market done as per the picture that the organization has about the customers in terms of their opinions, values, interests and styles. For example, for those kinds of people who are into athletics and sports, Nike targets them with athletic foot wears and also Nike targets those people with positive and good attitude towards their product (Barbanchon and Malherbet 2013).

Nike’s Targeting Strategy for Women’s Products

Nike has an undifferentiated targeting strategy for the women products. Nowadays, there is equality between the genders no matter what they do. Mainly because of this, Nike has kept their marketing strategy undifferentiated for women. They just target their market with respect to the age of the customers, mainly those who are youths and middle aged people without any exceptions to their age. For example, “just do it” and “write the future” are some of the famous slogans of Nike that has been able to encourage and motivate even women to come forward with the products and do good in their future as per the slogan. Of course, there are different products for women but the marketing strategy has been the same and it is working all well for Nike. For example with same slogan strategy, Nike came up with a slogan particularly for women as “Nike Goddess” which they brought to take advantage of the differences that is there between men and women. After this slogan was brought in the market, it greatly increased their market share on women market. The god thing Nike did before bringing women products in the market is that they took quite a long giving enough time on women listening, realizing and analyzing about their wants, desires, demands and furthermore, what they expect from an organization like Nike which has been able to do so well in the footwear department for men. Nike’s designers and researchers spent a long time in research works and designing particular product for women so that they expand their business well even in the women sector of their market.

Task 4

Marketing Mix

The marketing Mix is a very essential component of the marketing strategy of an organization. It is more popularly known as the 7Ps of marketing. The 7Ps are those controllable and interrelated elements of a business organization composed of Product, Price, Place, Promotion, People, Physical Appearance and Process (Huang and Sarigöllü 2014).

7Ps of Nike

Product

Nike’s main women products include shoes, apparel and equipment and accessories. Even for women, their main product has been the sports shoes which have been their biggest sector for revenue. Nike has particular kind of products made especially for women. There are some products particularly for women like Nike women Duffel bags, Nike Women Red Backpack, Nike Women Pure Deo, etc (Shank and Lyberger 2014).

Price

The strategy that Nike uses for pricing is that of value based pricing strategy mainly to ensure growth in its overall sales and profits. There is not much difference in the pricing of the products between the male and female products of Nike. Under its value based marketing strategy, Nike tries to determine how much their customers are actually willing to pay as per their perception about their products value. Their price for the sports shoes is much higher as compared to their other products (Kotler et al. 2014).

Place

Nike has a large number of outlets through which it sells its products all over the world. The most significant place Nike sells its product is to the retailers. And the retailers include the some of the big ones which have branches all over the globe such as Wal-Mart, etc. One can even find the Nike products through their online store. On the basis of this element of the marketing mix, Nike has a major control over the distribution and the sale of their products.

Promotion

Nike has a very effective and powerful promotion strategy to continue having a good brand image in the market. Advertisement has been the biggest strength of Nike on attracting customers. They make their advertising very powerful by inviting various artistes and celebrities to advertise their products. In a frequent basis Nike comes up with various promotional techniques like discounts, offers and so many other things to attract more customers.

People

It’s always very important to segregate a particular sect of people from the general public. Among the general people, Nike has been targeting particularly youths and the middle aged people especially for its footwear department. This is because they are the main group of people who are more into sports and fashionable shoes for which Nike is very popular.

Physical Appearance

Even in this regard, Nike has been a very dominating one. Nike’s products are such that it is easily recognized especially when it comes to shoes. There is a correct sign which symbolizes Nike. The invest quite a lot in designing their products and they structure it and design it in such a way that it can be easily distinguished from other products and also it becomes the center of attraction.

Process

The process mainly discusses about the planning work and the way the organization is going to execute the above mentioned elements of the marketing mix. For example, for promotion or advertising purpose, the organization must plan it well before. Nike does a very good planning and research works before bring out their products in the market. They first advertise their product really well and see the demands of the customers and as per that, they execute their work.

Part 2- Task 2

Communication Campaign of Nike Women’s Only Store

There have been a lot of promotional activities going on to promote the Nike Women’s only Store. The promotional activities include various promotional activities which are all under the promotional mix theory. The promotional mix mainly contains strategies like Advertising, Public Relations and Sales Promotion. Advertising has various forms. The main motive behind advertising is to make people recognize the organization. Another element of promotional mix is creating public relations. The public relation is mainly created to have a good image in the eyes of the general public for a very long term purpose. This will help the company to continue having good image even after when there lots of competitors in the market (Lee et al. 2017).

With the new objective, Nike have realized that women are a very big target market for them. Keeping this view, they came up with a famous ad where a girl is seen in a work out class saying “I can’t, I can’t, I did it.” This ad mainly focused on women to make them realize that there is nothing that women can’t do, and in fact, they can do whatever that the men can do. With this kind of campaign carried out by Nike for capturing women market in UK got them a huge response and they have been able to capture a very good share of women market.

Nike’s Channel of Distribution

One very smart work done by Nike is that while choosing channel they chose category specific channels. They have various retail destinations for their products all over the world which retails in specific products such as JD sports, intersports, foot locker, etc. Their sales to wholesaler giants are also to great extent.

The communications key message is to spread awareness among the people about equality. The new campaign and initiative is taken mainly to use the voice of Nike and the power of sports to encourage people to take actions in their community. Nike has been able to lead by example so far by being into partnerships with world class organizations to promote equality among the people and to eradicate biasness between the genders (Parente and Strausbaugh-Hutchinson 2014).

AIDA Theory of Nike

Attention

The first element in the AIDA model is that of Attention. Like any other organization, the first aim of Nike under AIDA is to attract attention of the general public. In an unopened state it must prevent itself from being discarded. Nike has been very good so far in this regard. The slogan it comes out for its products easily attract the attention of people. For e.g. ‘Just do it.’

Interest

The second most important element as per AIDA is securing interest. It is very important for Nike to create interest in the minds of the customers which will lead them to have more demands of their products. They have to focus more on this because there are many competitors coming up trying to capture the market (Rawal 2013).

Demand

Like that of interest, Nike should also be able to create desires in customer’s minds. This can be done if they come up with innovative new products. And they have been doing good even in this regard where especially for women they have come up with lots of initiatives which have brought desires in the minds of women to buy their products.

Action

They must be able to persuade the people to take actions. The means, now, they must be able to make people buy their products. And even in this regard, Nike has been a successful one. They have been able to easily persuade people to buy their products. And because of this very reason, they have been able to be one of the most successful one.

Conclusion

The report has very well discussed about the whole marketing strategy of Nike. The marketing and the communication of Nike have been very well discussed in the report. Nike has been able to do very well in all the departments of the organization. It has been able to do well even in its new strategies and also it has been understood that it plans very well before executing any activity which has been one of the key factors of success for Nike. The way Nike executes its business can be taken as an example by other organizations and especially by those which are about to come to the market and those which are new in the market.

References

Armstrong, G., Adam, S., Denize, S. and Kotler, P., 2014. Principles of marketing. Pearson Australia.

Ashill, N.J. and Jobber, D., 2014. The effects of the external environment on marketing decision-maker uncertainty. Journal of Marketing Management, 30(3-4), pp.268-294.

Benoit, W.L., Coe, K.M., Conners, J.L., Dailey, W.O., De Anda, C., Hinck, E.A., Hinck, R.S., Hinck, S.S., Koehn, A., Kuypers, J.A. and Lee, R., 2017. Political Campaign Communication: Theory, Method, and Practice. Rowman & Littlefield.

Cross, J.C., Belich, T.J. and Rudelius, W., 2015. How marketing managers use market segmentation: An exploratory study. In Proceedings of the 1990 Academy of Marketing Science (AMS) Annual Conference (pp. 531-536). Springer, Cham.

Hanssens, D.M., Pauwels, K.H., Srinivasan, S., Vanhuele, M. and Yildirim, G., 2014. Consumer attitude metrics for guiding marketing mix decisions. Marketing Science, 33(4), pp.534-550.

Huang, R. and Sarigöllü, E., 2014. How brand awareness relates to market outcome, brand equity, and the marketing mix. In Fashion Branding and Consumer Behaviors (pp. 113-132). Springer New York.

Kim, K., Hayes, J.L., Avant, J.A. and Reid, L.N., 2014. Trends in advertising research: A longitudinal analysis of leading advertising, marketing, and communication journals, 1980 to 2010. Journal of advertising, 43(3), pp.296-316.

Le Barbanchon, T. and Malherbet, F., 2013. An anatomy of the French labour market. Country case study on labour market segmentation. ILO Employment Working Paper, 142.

Lehman, K. and Wickham, M., 2014. Marketing orientation and activities in the arts-marketing context: Introducing a visual artists’ marketing trajectory model. Journal of Marketing Management, 30(7-8), pp.664-696.

Malhotra, N.K., Birks, D.F. and Wills, P., 2013. Essentials of marketing research. Pearson.

Parente, D. and Strausbaugh-Hutchinson, K., 2014. Advertising campaign strategy: A guide to marketing communication plans. Cengage Learning.

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Rawal, P., 2013. AIDA Marketing Communication Model: Stimulating a purchase decision in the minds of the consumers through a linear progression of steps. International Journal of Multidisciplinary Research in Social & Management Sciences, 1(1), pp.37-44.

Shank, M.D. and Lyberger, M.R., 2014. Sports marketing: A strategic perspective. Routledge.

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